Young people can expect to spend more than two years out of work before they
reach the age of 30, a major international study has found.

Britain’s high drop-out rates from education and employment represent the country’s “biggest challenge,” the Organisation for Economic Cooperation and Development warned.

But raising the school and college leaving age, a process beginning next year, will not solve the problem as simply “locking people up” in class will not give them the skills they need, the institute said.

The findings came in the OECD’s 435-page Education at a Glance report, which compared the performances of education systems in 42 countries, over the period since the financial crash of 2008 for the first time.

The research found that across developed countries, the gap in job prospects between those with good qualifications and candidates who left school early widened since the crisis between 2008 to 2011.

In the UK, almost a quarter of British people under the age of 30 who do not have secondary school qualifications such as five good GCSEs are neither employed, nor in education, or training, and known as “Neet”.

The UK’s 15 to 29 year-olds also face a particularly “tough transition” from formal schooling to higher education and work, with high drop-out rates immediately after the end of compulsory schooling, the OECD found.

Based on the pattern seen in 2011, young British people under 30 “are expected to spend 2.3 years on average either unemployed or out of the labour force entirely”, the report found.

This was longer than the average across the OECD, which was 2.2 years and far more than among Britain’s economic rivals in the survey, such as Germany and Australia, which both had average drop-out rates spanning 1.7 years.

Andreas Schleicher, the OECD’s deputy director, said some of these unemployed young people had “given up”. Others may be on gap years, but not working, before going to university.

Britain has a relatively high share of under 30s who will be “fine” because they are studying for a university degree, which will deliver up to £117,000 in extra earnings over their working lives.

Another group are also “fine”, Mr Schleicher said, because they have been able to find jobs, despite not progressing to university.

“But then there is this middle group that don’t get the right baseline skills to find the right employment and don’t have enough incentive to study,” he said.

“That is actually the biggest challenge for the UK, to provide this middle group with good educational opportunities.”

He said there was no value in simply encouraging disinterested young people to take any job that they could find, or to continue studying for the sake of keeping them off the dole.

They need “good foundation skills” in English, mathematics, and sciences, and a far better system of vocational education in the UK, the OECD said.

Over the next two years the legal school and college leaving age will rise from 16 in England to 18, which Mr Schleicher said “may change the picture slightly”.

But he added: “Don’t take that too lightly because locking people up in school isn’t necessarily leading to better skills.”

Neil Carberry, Director of Employment and Skills at the CBI, said employers were facing “a critical lack of skills” which risks holding back our long-term growth. “We cannot afford to waste talent,” he said.

“Raising the education and training participation age to 18 is right – but we need a much stronger system to get the most out of it.

“We need to end ingrained snobbishness about technical education.”

Sir Peter Lampl, founder of the Sutton Trust think-tank and chair of the Education Endowment Foundation, said the country’s high “Neet” rate, approaching one million, was “a shaming testimony to our collective failure to get vocational education right”.

“We can’t afford the economic and social cost of such shocking dropout levels,” he said. “If young people don’t develop their skills in work or education, they lose what they have already learnt and rapidly become unemployable.”